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Is the Real Estate Sector Set for a Turnaround?
Nov 14, 2019


Real estate is one sector that has tested investor patience over the years. While the sector has seen big moves in the last few years, the downward movement has been equally sharp.

The post demonetisation era has been tough on the sector. Excess inventory, i.e. housing projects stuck for years, has meant homeowners have largely stayed away from any fresh buying in the real estate space.

Also, post the IL&FS crisis, lending to real estate developers has largely dried up. The BSE Realty Index also reflects the same. It was down 31% in 2018.

But is the scenario about to change?

The government recently announced a Rs 250 billion package to bailout stalled housing projects. It's a much-needed relief for home owners.

The BSE Realty Index has seen a sharp bounce post this announcement. It is up 21%for the year.

What I'm more interested in is the pickup in consumption once the real estate sector revives.

Once people get their homes, they are likely to spend on tiles, paints, furniture, electronics, pipes, cables, cement, and many other things.

Watch this space for more!

Data Source: OECD Report

This Chart Of The Day was published in The 5 Minute WrapUp - How the Modi Government is Helping My Top 7 Stocks

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